August 28, 2014

The mercenary position

Private Maritime Security Companies- as middlemen using mercenaries for ship security are somewhat grandly called- are in bad financial shape; they are victims of their own success. Armed guards on ships have meant that Somali piracy has collapsed, even if temporarily, since many warn that pirates are biding their time until guards are taken off from ships leaving them defenceless once again. Anyway, since armed guards cannot be legally employed in much of the other piracy hotspot on the Western side of Africa- they are illegal in Nigeria- PMSC business has been drastically hit. The Gulf of Aden Group Transits, one of the largest PMSC operators, collapsed spectacularly a few weeks ago, leaving a million dollars in unpaid salaries and abandoning a hundred British and East European mercenaries on ships as if they were third world crew. (That somebody else is looking after these mercenaries now, repatriating and paying them, reinforces the value of the right skin colour). Other operators are also said to be in dire straits.

Unfortunately, the reality is that armed guards are the only proven way to protect ships from armed criminals of any hue- pirates, thieves, terrorists or whatever. The reality is, also, that attacks on ships are here to stay. The theatre may change; Somalia yesterday, West Africa and parts of South East Asia today and somewhere else tomorrow, but the play will remain the same. Ships are easy targets and the world is ill equipped to tackle attacks on ships; everybody knows that.

A shipowner’s default setting veers towards a ‘no armed guards’ scenario; the industry sees the high expense (a big multiple of the crew wages it loves to crib about) as justified only after an area has become very dangerous to sail through. Armed guards were put on ships around Somalia years after some of us were screaming about that being the only way. Hardnosed owners and insurers obviously do not want to pay thousands of dollars a day for armed guards unless they feel the risk-reward ratio justifies the large expense.

So the questions remain unanswered. How do PMSC’s survive when demand fluctuates wildly? Does the business model across industry factor in the use of armed guards in trouble spots, whether occasional or regular (on ships that spend most of their time in these war zones?). And of course, does shipping really want to protect their crews from armed criminals and terrorists by paying for mercenaries?

I only know the answer to the last of those questions- no. I can also see which way the answers to the others are likely to go. PMSC’s will have to make their business model more flexible; perhaps maritime security will be just one of a bouquet of security services they will offer to broader industry, pulling out people to place on ships when asked to do so. Or maybe by employing mercenaries only when and if required.

Shipowners and cargo interests will have to get used to putting armed guards on ships and offshore installations as a first or second resort, not the last. Their financial models will have to be tweaked accordingly. Maybe a time will even come, if this menace spreads or persists, when the industry and its regulators will consider arming crews instead. Maybe.

That is for the future. But even today, bodies like the IMO should be using their parent, the United Nations, to pressurise countries into accepting PMSC’s – and guns on ships- as a legitimate need essential to protecting the billions of dollars of ships and cargo that move across dangerous seas. We know that the alternative- refusing to sail ships off West Africa today, for example, or in other hotspots tomorrow- is just not going to happen.

Making maritime security financially, legally and operationally viable is something nobody is looking at, but that is exactly what needs to be done. Today.



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